New Delhi, Mar 20 (IANS): The Bombay High Court has ruled that investigation by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA), 2002, can be continued "even if the base offences are closed, compounded or quashed", Taxscan reported.

The accused, promoters of Omkar Realtors and Developers, had sought their release on bail on the ground of closure of the scheduled offence. They moved the high court after the special PMLA court in Mumbai rejected their plea on February 15, 2021.

Vijay Aggarwal submitted that the moment the scheduled offence comes to an end, the PMLA proceedings also come to an end, as per the report.

The lawyer added that it was a settled legal proposition that if initial action does not align with law, all subsequent and consequential proceedings would fall through for the reason that the illegality strikes at its root and the applicants could not have been remanded to further custody and were entitled to be released on bail.

The report said that the Single Judge bench of Justice A.S. Gadkari rejected the argument, observing that the investigation under the PMLA is totally independent of the scheduled offence.

"Once an offence under the PMLA is registered on the basis of a Scheduled Offence, then it stands on its own and it thereafter does not require support of Predicate/Scheduled Offence. It further does not depend upon the ultimate result of the Predicate/Scheduled Offence. Even if the Predicate/Scheduled Offence is compromised, compounded, quashed or the accused therein is/are acquitted, the investigation of ED under PMLA does not get affected, wiped away or ceased to continue. It may continue till the ED concludes the investigation and either files a complaint or closure report before the Court of competent jurisdiction," the court said.